Call rates are expected to be in a range of 6-6.50 per cent during the week amid comfortable liquidity condition in the market. Dealers said the liquidity is enough and it will remain so throughout the week, even though there will be advance tax outflows during the week.
Inflows to the tune of Rs 1,285.5 crore is expected on account of coupon payment on government securities. Though this is minuscule compared with ample liquidity in the market, it will certainly add to the liquidity comfort.
"The liquidity comfort in the market is reflected in the huge subscription in the repo auction which has been averaging over Rs 7,000 crore over the last couple of weeks. Moreover, there is huge unavailed refinance facility available with the banks. Hence, we do not foresee the overnight rates breaching the 6.50 per cent mark even if there is advance tax outflow," said a primary dealer.
In the first week of the fortnight, usually the demand for overnight money is slightly higher and there will be no exception this time as well. However, dealers are expecting ample liquidity to meet this demand as well. A senior dealer with a private sector bank said, "There can be some stray deals at more than 6.50 per cent level, but overnight rates will generally remain below that level."
Call rates were in a band of 6-6.30 per cent on Saturday. The treasury head of a private sector bank said, "Supply was more than the demand. In the first hour, there was a little demand for overnight money, but after that there was hardly any taker for the fund."
